First year with IBKR - dividends & taxes

[akiaji]

captainspoke, thank you very much for all the great feedback! Looks like I should be in a good position to report accurately.

[10-7]

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I have used the IB data for reporting, not my own spread sheets.
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Realized and Unrealized gains (you are only interested in the total of Realized gains/losses)
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Hi gaijin86,
If you're using the gain/loss data provided in a US brokerage account, it doesn't sound like you're doing the necessary calculations for currency conversion (purchase and sale) and average cost for your Japanese taxes.
The NTA requires that you use the average cost method to determine gains/losses and currency conversions would utilize the rate for the purchase/sale trade dates. The NTA doesn't allow any other method (FIFO, specific shares).
Also, when you change base currency, is the correct exchange rate (paid date) being applied for the dividend values?

[akiaji]

Just received the 1099 and other tax documents from IBKR today. Everything looks pretty clear.

Only thing I realized (that wasn't clear from the annual report I ran for 2022) was that some of the dividends were partially withheld by IBKR. The 1099 makes it clear how much the gross, tax, and net amounts are whereas the annual report only showed the net amounts paid regardless if they had been taxed or not.

For US tax reporting, this should be fine since the 1099 shows everything. For Japan though, I am wondering if I should include the pre- or -post tax amounts for calculating my miscellaneous income in Japan. In other words, if the post-tax amount is under the 200,000 JPY threshold for reporting, but the pre-tax is above it, which do I include for tax calculation?

***Edited to add
Oops, look like I misunderstood the 200,000 JPY threshold for miscellaneous income. In my case for 2022, I need to file the final tax return for other reasons, so even though the dividends paid out by the ETFs is under 200k, I still need to include them.

The calculations needed to use the foreign tax exclusion look like a nightmare, so I think since the deduction at the IBKR side was so small, I just ignore that for my Japan tax return. I'll just include the net amounts. If these ever become significant, then maybe need an accountant on this side to help me sort it out, but at this stage, it seems too small to deal with trying to claw anything back Japan side for such a small taxation in the US.

[Tkydon]

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[akiaji]

Tkydon, thank you for clearing up all those points. It is extremely helpful.

From my initial research, I had assumed that 配当 was for individual 株式 and 分配金 was for 投資信託. After some more looking around, I realize that ETFs are considered 上場投資信託 and their dividends are 配当 as you mentioned. Took a bit of back and forth to figure it all out. The Excel file for inputting things was pretty useful.

So I looked more closely at the tax withholding that happened. It only applied to my VXUS dividends, and on the 1099 it is listed as "Foreign tax paid" with no country of origin or further details in the document. I have sent them a ticket for further details but not sure what I will get. Without a country of origin for the tax, I am not sure how I could fill that in on the relevant forms. That said, I don't seem to have to worry about it this year as I get a message that 0 yen is applicable for the foreign tax credit anyway.

[Tkydon]

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